Trump says Iran economy in ‘very bad shape’ as Strait of Hormuz talks stall

US President Donald Trump said Sunday that Iran’s economy was in a “very bad shape” as his administration adopts a wait-and-watch approach while pressure mounts on Tehran amid efforts to reopen the strategically vital Strait of Hormuz.

Trump indicated that Washington was refraining from further military action while Iran continues to set tough conditions for reopening the waterway.

“We are low-keying it. We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money,” Trump was quoted as saying by Axios.

Trump, who had issued threats against Iran just a week earlier, struck a notably restrained tone when discussing the ongoing standoff.

“It will work out. It always works out. It’s like a chess game,” he said.

According to the report, Trump said the US naval blockade had further worsened Iran’s economic crisis. Tehran has demanded that Washington end the blockade of Iranian ports and lift oil-related sanctions before agreeing to reopen the Strait of Hormuz.

The waterway has remained closed since the US and Israel launched military action against Iran on February 28. The strait is one of the world’s most important energy corridors, with roughly one-fifth of global oil and natural gas supplies passing through it.

Trump suggested that the wait-and-watch approach had become easier for Washington as oil prices declined and American consumers were experiencing “less pain from the war”.

Iran denies direct talks with US

Iran, meanwhile, denied reports that it was engaged in direct negotiations with Washington.

Iranian Foreign Minister Abbas Araghchi said Sunday that the two sides were not holding direct talks, although messages were being exchanged through intermediaries.

Tehran has demanded that Washington fulfil its commitments under an interim agreement reached in June before direct negotiations can resume.

Under the memorandum reached between the two sides, Iran has sought compensation from the US for attacks during the conflict and demanded an end to the blockade and sanctions. Tehran has also called for an end to US military action against Iran and its allies in Lebanon, Palestine, Yemen and Iraq.

The standoff over the Strait of Hormuz continues to pose a major risk to global energy supplies, while both sides remain locked in a dispute over the conditions required to reopen the critical waterway.